Networks lower mobile roaming fees

By
Nancy Gohring, IDG News Service
| Mar 14, 2006

| IDG News Service

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Two more mobile operators have scrapped their roaming charges between the U.K. and Ireland, and similar reduced roaming fees are likely to come to users across Europe this year, according to one industry analyst.

On Monday, 3 Ireland became the third operator in that country to dramatically reduce or eliminate roaming fees between Ireland and Northern Ireland and between Ireland and the U.K. 3 Ireland customers can also make calls to U.K. numbers from Ireland for the same rate as a local call.

Vodafone Ireland, meanwhile, has said that starting on Tuesday, post-pay customers won't pay roaming fees when travelling in the U.K. and Northern Ireland, while prepaid customers will pay a reduced connection fee when roaming in the U.K. Vodafone and 3 follow O2, which in February became the first operator in Ireland to get rid of roaming fees to Northern Ireland and the U.K.

The reduction in roaming rates comes amid a broader push across Europe to drop what are seen as exorbitant roaming fees.

Many operators charge more than 1 (US$1.19) per minute when customers roam. The European Commission says such charges are excessive, and in February it said it would propose regulation preventing operators from charging more for international roaming than for national roaming.

Some operators are already taking steps themselves.

"They will be more pro-active because they're scared about regulation," said Martin Gutberlet, an analyst with Gartner.

Gutberlet expects to see operators in Europe reduce roaming fees by 20 percent to 40 percent this year, although getting to that point won't be easy. "On the one hand the operators are saying they're not interested in having regulation, but on the other hand it's difficult to find a common agreement to really bring prices down," he said.

The issue for operators in reducing roaming rates is that they must all agree to a similar drop in the fees they charge each other. If Vodafone were to drop its roaming rates for customers travelling to Spain, for example, Spain's Telefonica Moviles would also have to reduce the fee it charges Vodafone for allowing Vodafone customers to roam in Spain.

If Telefonica didnt drop its fee, Vodafone wouldnt be able to make any profit and in fact could lose money when customers roam.

Operators are trying to negotiate with each other to reduce the fees they charge each other equally, he said.

The situation in Ireland is indicative of issues across Europe, but it is also somewhat unique. In some high-profile situations, people living near the border with Northern Ireland have been hit with extremely high phone bills for unknowingly connecting to networks on the other side of the border. Their experiences have prompted the reduction in rates.

Meteor Mobile Communications, another mobile operator in Ireland, hasn't announced plans to eliminate roaming fees, but the operator doesn't own a network in the U.K. or Northern Ireland so is in a different position than its competitors.